Warsh mulls fewer FOMC meetings as bond honeymoon ends
The New York Times reports the Chair raised the idea of reducing the eight-meeting cadence at this week’s gathering. The bond market had already delivered its own verdict after the July hold.
Two stories landed on the same day and they belong together. First, the New York Times reported that Chair Kevin Warsh raised the idea of reducing the number of regularly scheduled FOMC meetings at this week’s gathering. The Fed has met at least eight times a year for decades. A change would be the most consequential operational shift of his tenure so far.
Second, the bond market’s reaction to Wednesday’s hold was already clear by Thursday. The 30-year yield spiked as much as 14 basis points toward 5.23%, its highest level since 2007. Short-end yields fell, producing a sharp steepening. The message from traders was blunt: tough talk on inflation without a clearer signal on the path of the funds rate is not enough.
Warsh has been explicit about wanting a quieter Fed—shorter statements, less forward guidance. Reducing the meeting cadence would be the structural expression of that philosophy. A Chair who wants fewer scheduled decision points is simultaneously being told by the long end of the curve that credibility still has to be earned by aligning words, votes, and outcomes.